The Enemy Property Act, 1968, was enacted in the aftermath of the Indo-Pakistani Wars of 1965 and 1971. During these conflicts, the Indian government, under the Defence of India Rules, seized properties belonging to individuals and entities deemed "enemies" — primarily those who migrated to Pakistan or China and were perceived as threats to national security. The Act formalized the vesting of such properties in the Custodian of Enemy Property for India, ensuring they remained under government control even after the wars ended.

The Enemy Property Act, 1968, reflects India’s wartime legacy and national security priorities. Its stringent provisions ensure that properties linked to "enemies" remain under state control, overriding inheritance laws. The 2017 amendments strengthened the government’s position, closing legal loopholes and reinforcing the permanent vesting of such assets with the Custodian. While it serves strategic and economic purposes, the Act remains contentious for its impact on descendants' rights.

The Act was amended multiple times, most notably in 2017, to address ambiguities and legal challenges. The 2017 amendment (Enemy Property Amendment and Validation Act) explicitly barred heirs of "enemies" (even if they were Indian citizens) from reclaiming such properties, reinforcing the government's absolute authority over them. This was a response to court rulings that had allowed some descendants to claim inherited enemy properties.